Jani Fowler, left, and daughter Jazmine, along with volunteer Kearston Hawkins-Johnson, shop at a Northside food pantry that receives food from Kroger. / The Enquirer/Adam Birkan

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A shopper and volunteers at CAIN (Churches Active in Northside) food pantry in Northside. The food pantry provides items – that originated at Kroger – to residents of Northside. The Enquirer/Adam Birkan

Kroger is helping feed more hungry Americans with greater efficiency thanks to an innovative program it launched last year with food banks in Cincinnati and Roanoke, Va., and has since quietly expanded.

The nation’s largest grocer is sending non-perishable goods that aren’t purchased in its stores – more than 8 million items worth more than $14.3 million since the program launched – directly to 11 food banks across the country. Next month, Kroger’s Las Vegas division will become the 12th of the company’s 18 divisions to adopt the program.

The result? Thousands of food pantries are distributing high-quality, non-perishable goods faster than ever before into the hands of people who need them.

“The model that Kroger has put together is different than anything we’ve had,” said Eric Davis, director of retail product sourcing at Feeding America,a national hunger relief organization. “Kroger’s made this so simple.”

These are products such as cereal, pasta, and canned fruits and vegetables Kroger can no longer sell in stores. For example, Kroger and its suppliers want to move goods that promote one-time events like the Super Bowl shortly after those events end. Dented soup cans or lightly damaged cereal boxes are also the types of items that get pulled.

Although Kroger is donating the items, the program involves the same level of sophisticated supply chain management that the company uses across its 2,400 stores and with its existing perishable donation program.

Kroger has spent hundreds of thousands of dollars to equip food banks with the necessary software and hardware to process and track goods. Kroger also pays for a supervisor to oversee the process at food banks when non-perishable items are delivered.

The investment is paying off, said Lynn Marmer, Kroger’s group vice president for corporate affairs, who calls the program a win-win-win. Kroger is serving the communities where it does business; better managing food items nearing their in-store expiration dates; and gaining favor with hundreds of suppliers who want to protect their brands.

Organizations such as Cincinnati’s Freestore Foodbank, meanwhile, have a new, consistent and high-quality stream of inventory. Locally, Kroger’s program has sent more than $1 million worth of goods to the food bank since April 2012.

The donations make up anywhere from 5 to 10 percent of the Freestore Foodbank’s monthly product base, which ultimately serves 275 food pantries in Ohio, Kentucky and Indiana. And it’s a key part of the organization’s goal to distribute 21 million meals this year, up from 7.5 million just four years ago.

“We have individuals who otherwise couldn’t get this kind of quality product,” said Freestore Foodbank CEO and president Kurt Reiber during a recent tour of the organization’s 110,000-square foot Mayerson Distribution Center. “It’s forward thinking like this that allows us to do the work that we have to do.”

'OPAQUE PROCESS' LEADS TO A SHIFT IN STRATEGY

For years, Kroger sent its unsold non-perishable products to third-party companies that would discard damaged goods and send the rest back to the manufacturer if necessary; sell the goods to discount operators; or route the goods to food banks.

While the procedure brought Kroger some revenue, it also included costs. More important, Marmer said the company was frustrated by what she calls a sometimes “opaque process” in the secondary markets, particularly because the grocer and its suppliers, for safety reasons, have a mutual interest in tracking products that don’t sell in stores.

Kroger considered setting up its own reclamation centers, but decided it was not core to its business model. Instead, it decided to cut out the middle man and partner with food banks to make them reclamation centers. It extends an existing program the company pioneered for perishable goods in partnership with Feeding America, which has 202 food banks in its network. That program resulted in Kroger sending 49 million pounds of perishable food to local food banks in 2012.

In 2012, Ed Taylor, Kroger’s director of retail operations, started building the non-perishable infrastructure using food banks in Cincinnati and Roanoke as pilots.

Kroger had to assure the food banks it wouldn’t use them as a dumping ground.

The grocer also had to develop the technological infrastructure so that food banks could efficiently receive, sort and track nonperishable items. If a product is recalled, the food bank must be able to find and destroy affected items, and confirm that action with Kroger and the supplier.

Finally, Kroger had to establish support from its suppliers, who often stipulate that unsold products be returned. Since those suppliers usually sell those items into the reclamation market or donate them, Kroger argued it would be more efficient if the goods went directly to food banks.

Kellogg’s, which this year announced an initiative to provide 1 billion cereal and snack servings to children and families in need around the world by the end of 2016, is among the suppliers that bought in quickly.

“We know there’s a big opportunity to increase donations of unsaleable products at retail stores in the U.S. to help fight hunger,” said Gary Piwko, director of remarketing and returns management for Kellogg Co. “We are very comfortable with the way Kroger and Feeding America handle our products.”

NEXT STEP IS TO MAKE PROCESS MORE EFFICIENT

Davis, of Feeding America, said some food banks have previously experimented with serving as reclamation centers. But under those models, the food banks acted as a traditional third-party vendor – which included the inefficient process of sending items back to manufacturers – and eventually they backed away from the model.

The key difference with Kroger’s initiative, Davis said, is that the grocer is pushing all of its suppliers to let unsold goods go directly into the food banks’ networks.

“Most of the major suppliers already work with us, so the Kellogg’s, the Krafts … they know who we are, what we are and how we work.” Davis said. “It’s more of the medium-sized companies where they may not be familiar with the process, and Kroger has to do some education on their part.

“If Kroger is saying, ‘We’ve done our due diligence on this process, have worked with Feeding America for 20-plus years,’ that certainly helps.”

In Cincinnati, Kroger now sends a truckload of nonperishable goods to the Freestore Foodbank every two weeks. The donations have become an important part of the Freestore Foodbank’s inventory. Reiber said the food bank expects the reclamation program to contribute 2.5 million pounds of food in 2013.

According to Feeding America, 1 in 6 Americans rely on food banks and the network for assistance – up from 1 in 10 in 1996 – and Reiber said innovations like Kroger’s reclamation project are critical to meeting that growing demand.

“Everybody’s benefiting from being more efficient and effective,” Reiber said. ⬛